Big brands make a big impact in all areas of consumerism, and the forecourt sector is no exception. But where brands on the forecourt were limited to the pole sign, pumps and products sold in store, recognisable names have made their way to other areas.
Retailers began to realise the benefit of putting a trusted grocery retail brand on their shop fascias some time ago, and now, according to the IGD, 85% of forecourt shops are fully-fledged convenience stores. But more retailers are also looking at the opportunity for linking with other brands to improve their shop services.
Forecourt Trader of the Year 2004 winners Peter and Pat Bellini, for example, are reaping the benefits of a Costa Coffee-branded in-store café; the BP Connect offer has been boosted by a Thresher wine shop; while other retailers such as Devon-based Chartman Group benefit from having an in-store Post Office, and being located on the same plot as a McDonalds fast food outlet.
Susie Hawkins, partner in Gloucestershire-based Simon Smith Group, recognises the importance of a brand name in running a forecourt operation: “Branding is crucial,” she says. “It’s crucial to get the right brand that gives customers confidence in what they’re going into. It doesn’t always have to be the best or the biggest brand, it’s what your market dictates, what type of area you are trading in, and the size of the site. It’s important to align yourself to the right brand that fits the type of site and type of customer you are going for.”
Franchising can offer forecourt retailers the perfect means of aligning themselves with well-known brands. As the British Franchise Association (BFA) claims on its website (www.british-franchise.org.uk): “You don’t have to come up with a new idea – someone has had it and tested it too. Larger, well established franchise operations will also often have national advertising campaigns and a solid trading name.”
The BFA also points out that good franchisers will offer comprehensive training programmes in sales and all business skills: “They can help secure funding for your investment as well as, for example, discounted bulk-buy supplies for outlets when you are in operation. If aware that you are running a franchise, customers will also understand that you will be offering the best possible value for money and service – although you run your own show, you are part of a much larger organisation.”
With a franchise, it’s the retailer that owns and operates the outlet, while the brand owner – the franchiser – retains control over the way in which products and services are marketed and sold, and controls the quality and standards of the business.
When it comes to cost implications of running a franchise, the BFA says that the franchiser will receive an initial fee from the franchisee, payable at the outset, as well as on-going management service fees – usually based on a percentage of annual turnover or mark-ups on supplies. In return, the franchiser has an obligation to support the franchise network with training, product development, advertising, promotional activities and management services.
Budgens demonstrates this approach by assigning a dedicated business development manager (BDM) to each individual business. The BDM is with the franchisee for the long term, helping with all aspects of the business from financial planning to ranging, merchandising and recruitment. Training support is ongoing, with trading models and business performance constantly reviewed to ensure that both parties continue to profit from the relationship. And through a self-governing council, which includes retailers and members of the Musgrave Budgens Londis independent store support team, retailers can have their say and contribute to the development of the franchise.
Successful franchisees will also be rewarded with greater opportunities. Phil and Lesley Tout have been Budgens independent retailers since 1999 and through their innovation and determination their business has grown year on year. The couple this year bought a Budgens corporate supermarket store in Cheddar.
Last year Somerfield introduced its franchise package for independent retailers and there are now four forecourt Somerfield franchisees – in Darwen, Lancashire; Blackwood, Gwent; Coal Aston, Sheffield; and Wetley Rocks, Stoke.
“It’s a major commitment,” says Norman Kears, franchise development director at Somerfield. “There are strict controls and disciplines to protect the Somerfield brand name; retailers have to make sure they maintain the right store standards.
“We have demonstrated that Somerfield can deliver all the back-up and support that our partners need added to their own local knowledge, independent flair and passion that appeals to neighbourhood shoppers,” says Kears.
The franchise package provides a balanced offer based on community partnership backed by cost-effective and substantial buying power, a robust supply chain and the benefits of a national brand.
Meanwhile, the Subway sandwich chain offers retailers a fast-food franchise opportunity. The chain already has franchises in almost 400 forecourts worldwide, and is currently working on a number of locations in partnership with Spar, which will see Subway outlets open in Spar stores all around the UK and Ireland. The first of these was the Spar forecourt in Holywood Road, Belfast, which was the first forecourt in Europe to feature an in-store Subway sandwich franchise.
Mark McCammond, operations director of Andrew Millar and Co, the retail company of the John Henderson Group which owns the Spar franchise in Northern Ireland, says: “There is a significant demand in the convenience sector for freshly prepared sandwiches, and I feel the partnership between Spar and the Subway chain can meet the demands of customers on the go and customers who want fresh, top quality products that offer something different. I am delighted at the success of the Spar/Subway partnership, and I already have plans for further developments within John Henderson.”
Chris Scott and business partner Alan Milligan bought their first Subway franchise in December 2003, quickly followed by a Spar/BP forecourt store in Ballyhackamore, County Down, Northern Ireland. “I felt that the Subway chain offered the quality product we were looking for with the right brand identity,” says Chris. “The costs involved were low, and it was reassuring to know that you have the full support of an organisation that is worth billions of pounds.”
The location of Ballyhackamore – on one of the main roads out of Belfast – has ensured that a busy stream of customers visit the store. Typically, between 13,000-15,000 customers come through the doors every week.
“Forecourt retailers are able to offer their customers freshly made breakfast rolls and sandwiches from early morning until late at night, and are able to provide food-to-go meal solutions for the benefit of both parties – an excellent fit for convenience stores and forecourts,” says Chris.
“The partnership with Spar works really well,” he adds. “We both benefit from the trade, and work well together to ensure we maximise the opportunities to sustain and create footfall. Repeat custom is high and we have found that our breakfast offers are particularly popular.
“A Subway store is also simple to operate, with no cooking or frying necessary – making the concept adaptable to virtually any location. Traditional forecourt food operations can be labour intensive at peak times, with no opportunity to downscale during quiet periods.”
Burger restaurant company Wimpy also offers forecourts a fast food franchise opportunity. The most relevant proposition for the forecourt sector is the Wimpy Kiosk, which uses a minimum amount of space and has a more limited take-away menu to enable retailers to offer high quality freshly cooked food to order.
Roger Ahearn, operations director at Wimpy, says: “The Wimpy kiosk is an ideal investment for high-traffic sites where space is at a premium, such as forecourts and convenience stores. The brand has huge consumer awareness and has been redesigned to both contemporise the brand and produce a more colourful, bright, modern and eye-catching image for the whole business.”
Wimpy franchisees are backed by full support from the field team including training, design and equipment specifications as well as the Wimpy Operations Manual. “All these elements, together with our extensive franchising knowledge, will help you during your initial start-up and guide you in developing your franchise into a successful and prosperous business,” adds Ahearn.
As part of the Wimpy package, the company also supports and promotes the franchisee’s business on a local and national level with promotional initiatives. The requirements for a Wimpy kiosk is a 130sq ft kitchen area with minimum depth of 9ft, and an additional storage area of 130sq ft. The initial investment is around £45,000 including a £7,500 franchise fee.
This time last year Wimpy also introduced a new Micro unit, and while the company has received a lot of interest from retailers, it is holding back from offering it to independents until full results of trials on three RoadChef motorway service areas are available.